Dubai's state-linked firms in solidarity over debt repayments

UAE: Markets in the UAE went into a tailspin in the second week of December after talk emerged on the potential restructuring of Dubai debt; and as ratings agency Moody's issued a report that the emirate's state-linked firms could need further financial support to repay obligations due next year.

However, perhaps in an unofficial show of solidarity, the firms and even Ahmed Saeed Al Maktoum, the chairman of Dubai's supreme fiscal committee, have reaffirmed their commitment to repaying the debt, around US$10 billion of which, according to Moody's estimates, are due next year.

Nakheel has emerged as the latest of the emirate's state-linked companies to report a paying down of its debt, announcing on the 8th December that it has paid nearly US$2 billion-worth of overdue payments to its trade creditors, marking "significant progress" in its recapitalization plan. The plan included the issuance AED4.8 billion (US$1.3 billion) in Sukuk, of which the first tranche amounting to AED3.8 billion (US$1.03 billion), was issued in August this year.

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